A recent article on Investopedia highlights how a person or family can manage to budget when they have little income or assets.

This is a difficult task and if you’re broke‚ you likely have already tapped into loans or credit cards to help you get by. In this economy and the high cost of living‚ it may be almost impossible to avoid debt.

People are out of work‚ the price of everything from milk to housing has increased rapidly and times are getting tougher. Consumers have begun relying much more heavily on credit cards these days. And that’s why considering bankruptcy in Los Angeles may work in your situation.

If you’re broke‚ it would be great if you are able to get by without relying on credit cards‚ but Los Angeles bankruptcy lawyers understand that’s not always possible.

Some people aren’t familiar with bankruptcy laws and believe that bankruptcy will do more harm than good. Some believe that filing for bankruptcy in Los Angeles will do damage to their credit score. But they probably haven’t checked their credit score in some time if they are battling off creditors and bank officials’ calls.

Bankruptcy laws are designed to save consumers‚ who some time ago would be put in debtors’ prisons with no way to get out. Now‚ people are able to have the debt wiped clear and can move on with their lives debt-free and with a plan to improve in the future.

But‚ still‚ there are steps people can take to avoid bankruptcy and a Los Angeles bankruptcy lawyer can help a consumer fight through budgetary issues. Here are some tips:

Avoid a major immediate disaster: This may be easier said than done‚ but it’s still important. Try to request a payment plan or bill extension to avoid getting evicted or foreclosed on.

Review your credit card payments: If you are making minimum payments‚ you are going to kill your credit score. But not making payments is worse. Late fees can kick in high interest rates‚ which can spiral your debt out of control.

Prioritize your bills: Check your bills and see what needs to be paid first based on due dates. Allow for catch-up time and don’t agree to pay everything if you really can’t afford it.

Ignore the 10 percent savings rule for now: Everyone should have a safety net‚ but if you’re broke‚ you may not be able to afford savings.

Review the past month’s spending: Use online banking software to see where you can make adjustments.

Negotiate a better credit card rate: With a good credit score‚ negotiating a better rate can’t hurt. The worst they can say is no.

Eliminate unnecessary expenses: Cable television‚ high-end coffee shops and expensive meals may be the first places you look to cut.

Journal a new budget: Journal your progress for a month to see if it is working for you.

Adjust spending as needed: Look for new ways to cut‚ perhaps generic brands over name brands or maybe sell some things that are just lying around.

Find a new source of income: You may be able to find a small part-time job to bring in a few additional dollars to help you get by.

Nader‚ Naraghi & Woodcock‚ APLC will provide a free consultation to help guide you in making a decision that works for you. In Encino‚ Glendale‚ and San Fernando Valley‚ just call (800) 568-0707.

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